New Orleans schools might get FEMA money soon

FEMA administrator Craig Fugate said Wednesday that his agency is getting close to an agreement with state officials on a lump-sum payment to the Recovery School District for damage caused by Hurricanes Katrina and Rita.But he said, because they are treading into new territory, FEMA wants to be very careful that the settlement will not run afoul of any future scrutiny by the inspector general.

FEMA administrator Craig Fugate says federal money may be coming soon to the Recovery School District.

The last thing folks in Louisiana need, Fugate said, is an agreement that looks good now but eventually leads to the money, on review, being "deobligated,'' meaning that the district would have to return the money.

Paul Rainwater, executive director of the Louisiana Recovery Authority, said that he and other state officials and officials of the Recovery School District will be meeting with Tony Russell, the head of the FEMA Transitional Recovery Office in New Orleans, on Nov. 24, to try to reach a final agreement on a sound methodology for a lump sum payment of about $2 billion for the Recovery School District.

About 130 schools were lost or damaged in the storms, and the district is expected to have 85 schools when rebuilding is complete.

Fugate made his comments at meeting with reporters at FEMA headquarters six months into a tenure that he characterized as trying to accelerate the "speed of government.''

In the course of an hour interview, Fugate also said that he thought FEMA was best left as part of the Department of Homeland Security, instead of being restored, as some in Congress would like, to the status of an independent agency.

Asked why, Fugate replied, "OPM - other people's money.'' What he meant by that is that he thinks FEMA's berth in Homeland Security guarantees it adequate funding and ancillary help that the Department of Homeland Security can provide that it might not have on its own. He also said that the argument of those who think that by being independent FEMA would have a "direct line'' instead of a "dotted line'' to the White House is overstated.

"Direct lines don't mean direct access,'' he said.

Most importantly, he said, time is limited and he would rather spend his devoted to FEMA's mission than the bureaucratic hassle of moving FEMA out of the Department of Homeland Security.

Fugate also said he felt that a new arbitration process being used to settle large, long-standing disputes between Louisiana and FEMA may offer a model that could be replicated in future disasters. Fugate, who was formerly Florida's emergency management director, said he well understood why local and state officials can become frustrated when all their appeals of FEMA decisions are handled by other FEMA officials.

The biggest outstanding dispute in Louisiana is over how much FEMA should pay to replace Charity Hospital. Earlier this year, Sen. Mary Landrieu, D-La., with the Charity dispute in mind, added a provision to the stimulus bill to create the arbitration panel. Fugate said he expected the Charity arbitration hearing to be held in mid-January.

Landrieu also authored a provision allowing lump-sum payments in the Katrina recovery. Rainwater said the first test of that was $150 million to the Recovery School District.

Fugate said the allowance of lump-sum payments in a catastrophe like Katrina makes a lot more sense than going "building by building,'' and Rainwater said in the Recovery School District case, the $2 billion payment could save the federal government $150 million to $200 million in administrative costs.For the most part, though, Fugate said that it may not be necessary to enact a legislative overhaul of the Stafford Act governing disaster relief, because most of the problems experienced in Louisiana could be remedied by a more practical and flexible interpretation of the act by FEMA, and, where necessary, administrative rule-making, which is what he has attempted to do in his time at FEMA.

Both Rep. Anh "Joseph'' Cao, R-New Orleans, and Steve Scalise, R-Jefferson, have sponsored measures to reform the Stafford Act, and many of their reform measures have been incorporated into the Disaster Response, Recovery, and Mitigation Enhancement Act of 2009, which was recently approved by the House Transportation and Infrastructure Committee, on which Cao serves.

Also on Wednesday, Homeland Security Secretary Janet Napolitano and Department of Housing and Urban Development Secretary Shaun Donovan, who are co-chairing the Obama administration's Long Term Disaster Recovery Working Group, told reporters outside the White House that they expect to present a report providing President Obama with recommendations on how to improve long-term disaster recovery with a particular emphasis catastrophic disasters, in early April.The interagency group is holding five stakeholder meetings. The first was in New Orleans earlier this month, followed by meetings in New York, Los Angeles and Salt Lake City. The last will be Monday in Memphis.

Jonathan Tilove can be reached at jtilove@timespicayune.com or 202.383.7827 .